Fight between carnival and lent… and how to become rich on free software

Piotr Karwatka, CoCEO Divante

Divante

• eBusiness Software House operating since 2008

• Over 180 people at our office in Wroclaw, Poland

• Offices in Rotterdam, London, Stockholm

• Clients from Europe, Asia, Africa and US

• Case studies: divante.co/portfolio

Key to success?

• Pragmmatic over egocentric

• Business goals first

• Best tools available

Marketing

User Experience

Technology

• 360 view of Customer• BigData - Actionable Data• Omnichannel Customer Experience• Omnichannel Loyalty• B2B Omnichannel• CRM Live Integration• Customer Database• Enterprise Serial Bus• Multichannel Management• Product Information Management• Digital Products• Omnichannel Order Management

We’ve built Divante services with Open Source at it’s core

Marketing Automation

CustomerExperience

Personalization

What’s Enterprise Open Source?

- Open Source software is inevitable- Enterprise Open Source = projects backed by proffesional companies: Magento, Wordpress,

RHEL, MySQL, Android …- Often along with commercial licences, support and services- Long ago stopped to be scored as “enthusiast based”, non-professional projects.

- Open Source is great for being used by Enterprises- fosters standarization / distribution - no vendor lock-in,- quality - are weable to write better code than contributors like Google, Microsoft …?- community and support,- security,- commercial services, SLA,- it’s so pragmmatic, developers love it, no marketing fluff,

- Hell has frozen over!- Even Microsoft open sourced .NET,

ported SQL Server to Linux andintegrated Ubuntu to Windows

The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future by Kevin Kelly)

Open Source Business Models

- Dual Licensing - Open Core (ex: Magento)- what you pay for: some extra features to be in

commercial version,- notes: how to make Core version good enough?

- Partners (ex: Magento)- what you pay for: Partners pay for certification- notes: why to become a partner?

- Consulting services (ex: Red Hat Linux)- what you pay for: customization, adding new

features, trainings,- notes: not very scalable,

- SaaS / Enterprise Cloud (ex: Mautic, Heroku, SugarCRM)

- what you pay for: hosting, SLA, provisioning,- notes: it’s no longer so open as it should be

- Mixed (ex: Magento)

Fight between carnivale and fest

Open Source products rarely are commercial successes comparing to proprietary equivalents

Why Open Source fails?

More: why Open Source fails. CIO Magazine

"If we look at Red Hat's market, 50 percent of potential customers may use Fedora (the free Linux distribution,) and 50 percent use Red Hat Enterprise Linux (the version which is supported and maintained by Red Hat on a subscription basis.) So a large part of the potential market is carved off – why should people pay the 'Red Hat tax'?" Peter Levine, a partner at Andreessen Horowitz.

- Revenue Limits - ex. Magento vs. Demandware- Uneven playing field - ex. KVM vs. VMware

Why should customer pay for commercial version / features / services?

Partners can canibalize software vendor businnes when original value offer is too low.

Example - Magento

Magento valuation when sold to Permira - along with GSI Commerce unit - was 925M$ (with 1.5% market share)

Demandware valueation when sold to Salesforce was … 2.8B$ (with 25% market share)

- strong Community, very active partner eco-system, mixed revenue streams

- … but most of revenue are probably NOT from licenses,- 1.x offers too low value offer Community vs. Enterprise- only around 25 EE licences sold in 2015

Magento: By Developers for Developers. Demandware: More Business focused.

Everything depends on how do you define success!

VARs (Value Added Resellers) and Agencies!

Who benefits the most in Open Source world?

It’s great to built your service or added value business on top of Open Source:

- you use standarized / commonly recognized base,- starting point is low - not have to built product at first,- you can focus on business value, extending,- you can achieve better results than software vendor

because your value is more appreciable by business customers who realy pay

- you can use all Open Source Business model as well.

So why anybody build open source projects?It always depends on how you define success!

Use your strengths and focus on business value!

How to survive as product vendor in Open Source?

At the time they sold MySQL AB to Sun in 2008, 70 percent of the company’s income came from licenses. “That was the reason that MySQL had a huge valuation,” Widenius said. “We were a product company and people had to pay for it in certain situations.”

BSL (Business Source License), FAIR.IO, OSE (Open Source Eventually)

- Idea initialy wasn’t mean for aiming commercial success but for founding MariaDB foundation

- But it’s really interesting for enterprise products!

- Mixed approach:- Always Open Source or Open Source from

some point (OSE approach)- Free to some point (CPUs, accounts …?)

- VBP - Value Based Pricing - ”success share”- No questions about “Why to pay” with all other benefits

of open software- Still great for Agencies - there is license fee to share!

More: MySQL founder tries a new software licensing model. Techcrunch.

- Open Loyalty is Open Source loyalty program ready to use out of the box,

- CDB - Central Database and 360deg view of customer (offline / online)

- POS - application,- End-customer application,

- If you’re Agency you can use it to implement omnichannel experience for your retail/eCommerce customers,

- Licensed using BSL-like license - always open source- with Value Based Pricing.

Open Loyalty

We decided to build Enterprise Open Source product to be used by eCommerce / marketing agencies based on our experienced for large companies like SMYK.COM, ING, ENERGA, PZU, JTT

First case studies underway! Alpha tests for partners are open!

„Can you give me your phone number to get

bonus (..)”Buying off-line

Mobile App / SMS

Client Sales clerk

How it works?

receipt

order info

Customer-order matching

phone number

bonus points alerts recommendations

Customers DatabasePromotions Rules

ERP / POS Integration

Earning point rules

13

Reward campaigns

14

Dasboard

15

Customer profile

16

Levels

17

POS Cockpit

18

ESB

Open Loyalty is Omnichannel Enabler - Open Sourced, easy and fast to deploy

B2B

B2C

Self

Serv

ice

Mob

ile

POS

Amaz

on

eBay

Raku

ten

Alle

gro

Shop

in S

hop

.. .. .. .. ..

Magento 2.0 PimCore

EDI

API

XML

Open Loyalty based on Symfony 3.0

Rapid B2B Rapid B2C Marketplace Multichannel Loyalty Program CRM(OroCRM)

BI(Pentaho)

PIM CMS

OMS POS Mobile

Marketing Automation(Mauutic)

Win using Open Source with Divante

Discuss how you can win with Open LoyaltyJust grab us your e-mail: pkarwatka@divante.pl

Divante UK286C Chase RoadLondon, N14 6HFUnited Kingdom(+44) 20 30115154mblum@divante.co

Divante Sweden

Divante HQ

Divante NLDivante UK

Divante HQ17 Dmowskiego Street50-203 WroclawPoland(+48) 733 355 596sales@divante.pl

Divante HollandRivium Quadrant141-181, 2909 LCCapelle aan den IJsselThe Netherlands(+31) 657 625 006mpolak@divante.co

Divante SwedenErik Dahlbergsallén 15115 20 StockholmSwedenkpodeszwa@divante.co